Banks still exposed to building sector ‘shocks’ claims Central Bank report

Domestically-focused Irish banks still remain vulnerable to shocks in the property and construction sectors, a new report by the Central Bank has claimed.

In a pre-released signed article, entitled ‘Internconnectedness of the Irish banking sector with the global financial system’, issued ahead of today’s publication of its first quarterly bulletin of the year, the Central Bank said while Ireland’s domestically-focused lenders are far more exposed to households and corporates than their foreign-owned counterparts here “both types of bank have a large proportion of their corporate lending with the real estate and construction sectors and the domestically-focused banks, in particular, remain vulnerable to shocks in these sectors.”

Overall, it could be viewed that the domestically- focused Irish-based banks appear to be less exposed to external market risks than their foreign-owned counterparts.